Sunday, December 10, 2006

Prime Minister, for setting up a Taskforce to investigate the concept of emissions trading!

Get those submissions in now.

My note of congratulations, in Monday's Canberra Times, is over the fold.

The Prime Minister should be congratulated, not condemned, for setting up an inquiry to emissions trading.

Within minutes of John Howard announcing the terms of reference and membership of the inquiry yesterday environmental critics labeled it a “joke”, stacked in favour of industry.

It is true that many of the members of the Prime Ministerial Task Force are from industry. Peter Coates is from Xstrata, one of Australia's biggest coal exporters, John Marlay is from Alumina Limited.

But composition doesn’t guarantee outcome. Just ask business figures Peter Hendy and Dick Warburton. In the lead up to this year’s budget they were bleating about how Australia’s tax rates were too high.

The Treasurer asked them to inquire into how Australia's tax system compared internationally, they were forced to conclude that it fared well, and they stopped bleating.

The fact is that a system of emissions trading has a lot to offer business when it comes to cutting greenhouse gas emissions. It ensures that they are cut in a way that produces the least economic damage.

An inquiry with broad terms of reference, as this one has, is likely to find that out.

One of its members is the Secretary to the Treasury Ken Henry. Nobody’s stooge, he has one of the finest minds in the land when it comes to understanding the power of market mechanisms, and how to harness them in the national interest.

It won’t be easy to design an emissions trading system that really works well. Many people say that the European system does not and that the Kyoto system cannot without the participation of big polluters such as China and India.

The Taskforce has been given five months to distil what is known and come up with the best possible scheme that serves Australia’s interests.

It is a big gesture for a Prime Minister who has previously opposed emissions trading to set up such an inquiry.

There is no way he can possibly know what it will recommend.

If its recommendations are well argued they are likely to greatly assist Australia to navigate the challenges posed by Kyoto without too much economic damage.

Peter Martin AM

For mine one of the best economic journalists in the country - Bernard Keane

The best economics correspondent- Ross Gittins

At least he is consistent, consistently wrong - Jamie Briggs

Peter is Business and Economy Editor at The Conversation and and a visiting fellow at the Crawford School of Public Policy at the Australian National University. A former economics editor of The Age and economics correspondent for ABC radio, he co-hosts The Economists on ABC RN.